EIOPA speaks on Brexit – “empty shells or letter boxes are not acceptable”

Gabriel Bernardino, Chairman of EIOPA, delivered a speech on opportunities, challenges and regulatory developments. Mr Bernardino concluded his speech with an explanation that EIOPA’s priority on Brexit is focused on the supervisory approach towards the insurers based in the UK seeking relocation of subsidiaries in the EU.

He confirmed in his speech that empty shells or letter boxes are not acceptable. An appropriate location of management and key functions including outsourcing and reinsurance policies is required for sound supervision. EIOPA’s oversight team is visiting national supervisory authorities engaged in discussions with companies in the UK.

Mr Bernardino’s speech also considered the following topics:

  • EIOPA’s approach towards consistent supervisory practices and common European supervisory culture to ensure a level playing field. On this topic, Mr Bernardino commented that EIOPA is not expecting major changes in the capital needs of Solvency II.
  • The development of a successful industry in a challenging environment. EIOPA expects insurance companies to promote a strong risk culture; use the Solvency II public disclosure as an opportunity; and develop a consumer-centric culture in the digital era.
  • The international capital standards

With regard to Brexit, EIOPA plans to publish guidance for national supervisory authorities on sound principles for authorisation and supervision and will subsequently closely monitor their implementation.